035R - 4 Percent Rule The Friday Roundup

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0 - 12 Jonathan Mendonsa OK guys thanks for joining us today this is your Friday round up Congratulations you've made it to the weekend and I had Brad here with me today. He is actually going to be doing this podcast from I believe New York. Is that right Brad.
12 - 24 Brad Barrett Yeah. Yeah. Hey Jonathan I'm on vacation as I've talked about in a couple of podcasts before and this and I'm sitting here in the basement of my in-laws house with my trusty laptop and my microphone and ready to rock and roll.
24 - 28 Jonathan Mendonsa Strong location independent. I think we found a good side hustle.
hustle
28 - 30 Brad Barrett Yeah yeah I think that sounds pretty good.
30 - 112 Jonathan Mendonsa OK. So today we're going to talk a little bit about the episode on Monday. Lots of stuff there. This was a long requested episode. It was one that when Brad and I started this podcast back in January we were scared to do. I mean sequence of returns is not something that you tackle lightly. It takes some thought and some planning. And obviously there was some building blocks to FI that you had to put underneath that before you could really tackle it with any sort of authority. And big Ern is is the right person to help us explore that topic. Help us unpack it and he did a great job. He has a 17 part I think he's about or at least the eighteenth part very soon series on safe withdrawal rates. It's a phenomenal walk through how to explore the math and how safe withdrawal rates are the four percent rule are three and a half percent rule or the 4 percent rule of thumb however you want to phrase that how that can actually be implemented for your specific situation but sequence of returns is what we have been calling the gorilla in the room and it's this idea that the returns that you get over those first few years really dictate your chances of success or failure. And we got a chance to really hit this from several different angles and I think it told a pretty compelling story but it'll be kind of it'll be exciting today to get a chance to really talk about my takeaways and also get a chance to hear Brad's takeaways. And we've also been able to bring in some of the feedback from our community as well so we'll hit on a couple of things that we saw on our Facebook group this week.
112 - 181 Brad Barrett Yeah I'm actually most curious to hear what the feedback from the audience was. I know because I'm on vacation I haven't had the opportunity to be in the Facebook group as often as possible. So yeah I'm as curious as anyone to hear that. But yeah I agree. This was a long awaited episode. You know you use the word we were scared to do this. I think there needed to be building blocks first. You can't just jump in on day one with big Ern and sequence of return risk. I like to think that just wasn't the right order. I think we tried to explain the concept of FI. We tried to explain the benefits we try to explain the background math you know the simple math right. The 4 percent rule quote unquote big is that at least paints the picture of what we're trying to do here. But I think as many people in our community have pointed out it's just not that simple and clearly we were never trying to paint this as something that. Oh you get 25 times your expenses saved up you can retire and laugh all the way till you're 100. That's just not realistic. But but it is important to set up that background and now that we are more mature here in the community and people do have the background sequence of returns risk it is important. And frankly this is something that I wasn't as well versed in until we spoke with Ern.
181 - 248 Jonathan Mendonsa Yeah I love hearing your thoughts on that and I could not agree more. This show has developed and our audience really has developed right along with us that Facebook group that we were just referencing has over 2000 people in it now. And a lot of those kind of entry level questions that people were asking at the very beginning. Now they're answering it for new people that are finding the group for the first time. So we're all growing together and chooseFI. When we started this it was going to be this idea of a journey. It was this roadmap or this blueprint to financial independence and we started with broad strokes and we gave you the baseline that all of us have after we've read bloggers like Money Mustache and JL Collins the broad strokes that all of us understood and now we're able to do is go in and do the detail work. Show you the nuances. And honestly this conversation did not make me more depressed or convince me that it didn't work. No it gives me more confidence in the environment in which I find myself in it. And it made me feel empowered to be able to handle the curveballs that life will throw at you. Murphy and Murphy's Law. What can go wrong will go wrong. This is what it looks like. And if you know the rules you can win if you don't know the rules you're guaranteed to be ambushed by something that you didn't expect.
blogger
248 - 348 Brad Barrett Yeah and I agree with you completely that this actually made me feel more hopeful in this kind of bizarre way. I was worried thatErnwas going to have doom and gloom essentially but it was the polar opposite of that in my opinion where he was adjusting for these real world scenarios as well versed as Ern is in the numbers. Right and clearly he's an expert on a different level from just about any of us. He didn't just focus on the numbers. That's what I thought was so brilliant about his episode and is why I'm going to go back personally and listen to it again and again is that it was all about the real world and he was saying that in real world scenarios nobody would react like things go in his calculations right like nobody would blindly and stupidly just continue to draw down regardless of the facts on the ground. And people would as he said they would maybe earn some more money. Right. They'd have a side hustle they'd lower their spending it they'd adjust in some manner or another option would be to take 4 percent of your current portfolio each year and not be as just blindly and stupidly again on on that original portfolio. So look those are just a couple of tiny little things that you could adjust and really up the odds of success even if you were extremely unlucky and had this scenario where there was a huge draw down in the market in your first five years of retirement or like we talked about the double whammy of that 1959 cohort that we talked about that is just really just bad luck. But you can still adjust and you can still retire early. So this is not some pipe dream it's not. Oh I'm going to retire early but I have to worry about sequence of return risks and that's going to destroy me. That was not Ern's message at all. And I thought that was a very hopeful thing.
hustle
348 - 442 Jonathan Mendonsa Absolutely. Now I will say there was the one side of this and it's the unfortunate thing because honestly Brad and I are very optimistic people and we want everybody to be able to win all the time. But there was one takeaway and that was the savers and the early retirees cannot both be happy at the same time when it comes to sequence of return risk. So if you go back and listen to that episode sequence of return risk is extremely beneficial for the saver so if you have that early on market crash and then it putters for a while before it comes back up for the first five years for the savers the people that are plowing money into their investment vehicles they are winning by this and frankly they would be tempted to say that the crash is the best thing that could ever happen for them. So long as they don't lose their job because they are able to continue to put money in at these depressed prices and then when the market comes back up their investment vehicles obviously ride that ride that tidal wave back up to the top. Unfortunately for those early retirees that are pulling the trigger at that same moment those first five years are extremely dangerous. So you really can't plan this you can't decide when the crash is going to happen or when the market's going to take a downturn that is not under your control. But if you understand the rules and you understand how a sequence of return risk works you can then mitigate the damage that it will do. And depending on where you fall on this curve you can make choices even choices ahead of time before it happens. That will prevent you from taking the full brunt of this risk. So You get to mitigate sequence of return risk at the margins and provide yourself with the chance to have the best outcome for your specific situation and for your specific timeline cohort.
442 - 587 Brad Barrett And wasn't it fascinating that Jim Collins on episode 34 and now ERN on episode 35 both essentially said the same thing right about the saver. So the best thing that could happen to you as as that saver someone just starting out is that market crash. And certainly Jim was vehement about that that he would hope the best thing someone could ever happen is a 90 percent drop in the market because then that saver would be able to just plow money in and it's all predicated of course on having a huge savings rate which is what we talk about here. at Choose fI and the FI community generally. And if you have that huge savings rate you just keep plowing money in and you're buying on sale. Right you're buying that same slice of all the publicly traded U.S. companies is when you buy VTSAX but you're but you're buying it for 90 90 percent off of what you would have paid the week before. So I thought that was an interesting parallel. And one thing that definitely jumped out to me about Ern is that the sequence of return risk is largely it's not about these minor temporary drops or even a 10 or 15 percent drop in the market that you know would be sensational front page news for months. Right Jonathan I mean that's that's just how that kind of stuff works. But that's not even what Ern's talking about. He's talking about prolonged downturns and significant downturns. Right so I think he said something to the tune of five plus years. I think he even said five to 10 years and 20 percent or more. So those are the kind of scenarios that we're talking here. Otherwise your chance of success is still significant. Even if you did retire and the market dropped 10 percent which again to you would seem calamitous even still you could have just a little bit if your nest egg went from a million dollars to 900000. Well you can just take four percent of that 900000 and take out $36000 a year instead of 40 and tighten your belt a little bit. Right. You don't even necessarily have to do this according to the math. But if that would make you feel better if that was the real world scenario that Ern was talking about then it increases your likelihood of success dramatically. I mean it's a combination of the numbers and the real world just rationality that you need to take into account and your chance of success is going to be significant other than in some horrible scenario. That's what we're really talking about with the sequencing return risk is the five to 10 year downturn that's huge significant and prolonged. So those are the kind of things where you need to really change your mindset and change your plan.
indexfunds, mindset, savings
587 - 939 Jonathan Mendonsa Well let's slow down and talk about that 4 percent rule just for a second because I think this is the place where we need to actually pin down what that 4 percent rule actually means so generically we've said it's just if you have a million dollars 4 percent is $40000 a year that you can draw. But specifically the 4 percent rule as it's understand generally by the FI community is a fixed number so no matter what the market does if it goes up or down when you hear just the 4 percent rule people are suggesting that you start you pick the number based on the initial value and then you can just keep it there no matter what happens and it will just work for you. And so look what Brad and what Ern was saying is if you're willing to change it from a fixed number to a percentage number so for instance 4 percent of a million dollars is $40000. And let's say your accounts go down to $500000. Then four percent of that will be $20000. If you do it as a percentage then you will never run out of money. But the problem with that is that those massive swings will will obviously cause some huge distortion in what you can spend it. Now the upside of that is if there's a year where your accounts go up something absurd like 15 or 18 percent in a single year. If you're using a fixed number you would still just draw up the 40000 whereas if you're allowing yourself to do a percentage basis if your accounts have suddenly grown up to $2 million you can now withdraw $80000 a year. So this was not the conversation where we're going to try and pin that down exactly. Actually we have some plans to start talking about drawdown strategies and I don't think that we're going to limit ourselves to one perfect scenario where we're going to do is we're going to actually find people that have done it different ways and to go find some experts that have taken the time not just to decide what their drawdown strategy is going to be but actually commit to it on paper and we're going to get them to explain it to us. And we're going to provide you a couple of different ways to approach this. That way you can find a drawdown strategy that fits your psychological model or your mental model or something that you're comfortable with. But the other half of this that I wanted to go back to is the actual Just fixed 4 percent rules. You have a million dollars a year which are on 4 percent a year you're not going to change it you just drive 4 percent a year. What people don't talk about nearly enough and frankly something that I haven't spent a lot of time thinking about is that that 4 percent is inflation adjusted inflation is built into that. And so I'm going to read a question that we got from Stephen and I want to preface this by saying that we went ahead and got Big Ern to respond to this. So Stephen says Great episode one of the questions I had while listening is this if we're using a safe withdrawal rate of 4 percent and say we have a million dollars and are taking out $40000 yearly from that from the episode it sounds like that our number without any variables we would continue to take out 40000 yearly for the rest of our lives. And what happens with inflation that 40000 will be worth less and less as we age. So essentially Should we be taking out 4 percent safe withdrawal rate plus inflation every year to maintain our standard of living. Seems like that is the way it should be. But I couldn't quite figure that out and didn't hear it on the podcast. Nice work though I really enjoyed the perspectives. So Stephen the Friday roundup is the place where we try to address the nuances that we missed in the episode and so we have actually already reached out to Big Ern to get his feedback on this so Big Ern says that's a great question. I do take inflation into account in my simulation so withdrawals are indeed adjusted for inflation and they retiree does not have to worry about inflation eroding the purchasing power of his or her retirement. You can do the simulations with inflation adjustments at least two different ways and they will produce the same results. Your first option increase the nominal withdrawals by the Consumer Price Index or CPI every year. For example the 40000 would become forty point eight thousand in year two with a two percent inflation that year and then 42000 in year three if inflation was 3 percent the next year and then simply add the capital market returns to the portfolio net of withdrawals every year and then your second option and this is actually the option. The Big Ern uses it sounds slightly more complicated. So he says he keeps the $40000 withdrawals constant but then he applies real inflation adjusted returns to the portfolio. So what that means is he takes his equity and his Bond returns and he subtracts the inflation from that. So let's say that he makes 12 percent and the inflation that year is 3 percent. He withdraws that 3 percent. Adds that to the 40000 and he puts the remaining balance back into the portfolio. So then if the portfolio ends up at you know some number of dollars down the road after 30 years the final value is also in inflation adjusted terms because he's been withdrawing that inflation the entire time. And he says whichever method you use it doesn't really matter. But he's seen some shenanigans on other blogs when using method 1 for example the misleading claim that when using the 4 percent rule in 90 percent of the cases you would have maintain the initial capital after 30 years. He says that's true but people forgot to mention that the final value is not inflation adjusted so the probability of preserving your capital after inflation is much lower than 90 percent. I hope I didn't lose too many of you there. But basically if you're considering success so let's say that you have a million dollars right now and you're considering success to be to preserve your capital 20 or 30 years from now and 20 or 30 years from now you still have a million dollars in your account that is not the same as a million dollars today. That is not into account that inflation has eroded the purchasing power of that million dollars. So in terms of real returns you need to have a million dollars in order to truly consider yourself having preserved the capital not erode the capital your million dollars 30 years from now needs to be inflation adjusted. So imagine that's 3 percent every year for the next 30 years. A million dollars would be significantly more. 30 years from now. Then in today's dollars and by the way for those of you like me that are drawing W-2 income do you now get more irritated when you only get a 1 or 2 percent raise or are you going to raise that literally doesn't keep up with inflation. Sidebar soapbox but yeah I noticed that.
939 - 1037 Brad Barrett But what's so interesting is also like the real world perspective. Right. So I'm I'm hearing this and of course I conceptually understand that a million dollars today is not the same as a million dollars 20 years from now. Right because you have to adjust for inflation. But if you're telling me that I could pull out essentially my using this 4 percent rule of thumb right the very loose 4 percent rule of thumb pull out $40000 a year every year for the next 20 years. And maybe we could argue inflation adjust or not but largely irrelevant. If I could pull out $40000 a year and still have a million dollars left 20 years from now that to me is a real world resounding success it's not even close right. I'm doing cartwheels if if that's the case. So just looking at this from my own perspective and I suspect a lot of people's perspective like that is a success. So it might not be the mathematical success that Ern might be talking about it but in the real world if I had been able to live a FI lifestyle for 20 years pulling out by the amount of money I need to live and sustain myself every single year in a very nice lifestyle and still have the million bucks 20 years from now I'm thrilled. So you know again it's all about where you're coming from right. I mean I might even argue that even if I had less than a million dollars I'd still be thrilled. Twenty years from now. But you know that's a conversation for another day surely. But yeah this is definitely comes down to your own perspective and how much the math means you or how much the real world scenario means to you. So again a topic for another day. But I challenge you guys out there to really think about what success would look like for you.
1037 - 1150 Jonathan Mendonsa And pause on that. That is ultimately what is going to dictate. This idea of what your safe withdrawal rate needs to be it's what is your definition of success I believe and Ern can correct me if I'm wrong. But in many cases Ern is talking about preserving capital and he is basically saying that if you are wanting to preserve your capital and not just your capital but your capital in inflation adjusted dollars his federal rate is 3.3 percent and you know when he adds in others idiosyncratic factors social security possible pensions that sort of thing. It goes back up to like 3.5. But if he's considering that success rate to be preserving his capital in inflation adjusted dollars you can understand why he's going to need a lower safe withdrawal rate for that. Conversely if you are not as concerned about preserving capital or specifically preserving capital in inflation adjusted dollars then potentially you're safe withdrawal rate could be a little bit higher. Also that flexibility component Ern landed on. He was talking about geo arbitrage as the tool. All the other stuff that we talk about doesn't go out the window. You need to realize the more tools that you have in your bag the ability that you have to pivot with what the market sends you all those dictate what withdrawal rate you're going to end up landing on. And the other fact here is that one of the things that makes this so dicey is these tiny margins with which you're working. And also what you're what you're defining as success in many cases you may only be moving the safe withdrawal point by a tenth of a percent but depending on your idea of flexibility in whether or not you're going with fixed or percentage based withdrawals the difference can be hundreds if not millions of dollars when you're projecting out down the road. And depending on on what the market actually ends up doing. So this is a very nuanced game and trying to put this one dimensional number on it makes it extremely difficult. So our goal is not to say this is the one number but we'll let you understand what the different factors are that you need to consider so that you can pivot with your own unique circumstances and timeline.
geoarbitrage, pensions, socialsecurity
1150 - 1191 Brad Barrett Yeah and it always comes down to facts on the ground. Your own personal situation and what your definition of success is. Right so like talk about different scenarios. What if someone didn't care about passing on the capital to heirs or anyone in their family that changes the ballgame entirely. Do they really care about preservation no. They just need the money to last their lifetime. So that's something that can change the calculations significantly. And there are many many of these things and we could not possibly talk about this on hour podcast. I mean it's inconceivable to talk about every possible scenario that everyone out there has. But as Jonathan just said look it's just laying the groundwork is that the right word.
families
1191 - 1196 Jonathan Mendonsa I don't know but I can't hear the word inconceivable without thinking about Princess Bride.
1196 - 1236 Brad Barrett I'm not sure for her it means. Ok let me try to finish right. But we're just trying to lay the framework here for you guys to understand what you need to think about right. So while the math is elegant and it's beautiful it's not everything it's not the entire story and it never will be. Even Ern certainly makes allowances for these real world scenarios. So that's the kind of stuff that you just need to use as the starting point for the conversation with yourself with your spouse with whomever That's for you guys to figure out. But it's for us to at least paint this picture of what you need to be thinking about.
1236 - 1443 Jonathan Mendonsa And now that we've gotten a chance to explore the math and how it works as soon as we've done drawdown strategies going into the future we're going to be able to bring in specific people and have them share what their strategy is like their actual numbers and what their plan is and how they plan on responding to different market variances so you will get a chance to see specific cases where people are actually doing going into the end of this year beginning of next year. But hopefully this is going to provide us a similar foundation that we can all work from going forward. Now there's two points that I wanted to round this episode out on the first one that I want to talk about and get Brad's input is this idea of whether or not you should pay off your mortgage. Now ultimately this is going to be a very personal choice and I don't think there is a wrong answer but I will say that all too often and especially from Dave Ramsey you hear a very one dimensional answer. Pay off your mortgage pay off your mortgage pay off your mortgage and it has to do with cash flow. And the challenge that he puts out to his listeners and even me I felt it at a very personal level. If you had a paid for home would you go out and borrow the same amount of money at three or four percent and generally that the the wisdom or the what you hear back the feedback is no. So Dave Ramsey says well then you should pay down your mortgage and that has been enough for me in my own mind to convince me that paying down the mortgage is almost always the right answer when you can or at least enough of it. That is probably personally what I would have done. I'm a very debt averse person. I do not like any form of debt in my life. I want to completely get rid of all of it. And I think that that is always just kind of been a part of my lifestyle. In fact it's not just the Dave Ramsey crowd Mr. Money Mustache has a paid for a home. There are there are many FI bloggers that have extremely low cost of living lifestyles and as a result that when their life only costs 20000 or $30000 a year their money goes a lot farther. So I get the compelling case for that. But in this specific episode this was the most compelling case that I've ever heard and certainly a place to start from for why you should not necessarily in every case pay off your mortgage early especially when you're talking about being in your 20s and 30s and it goes to the idea of sequence of return risk and ultimately one of the ways to mitigate the damage of sequence of return risk is to be plowing money into equities into the stock market or if you're falling specifically our advise into your index funds over long swaths of time 10 20 30 years. And if you decide to pay off your mortgage early you're 200 300 $400000 mortgage. You decide to throw all of your money at that investment. That's a three or four percent fixed interest rate. That means you have less to invest in the stock market which means that let's say you spend 10 years and you pay off your mortgage for 10 or 15 years and now you only have 20 years left to invest before you pull your FI trigger. You are now cramming all of those contributions into a smaller window which means you are at a higher risk of being vulnerable to this sequence of returns. And so ERN makes the case that at least early on you plow as much money into equities as possible which then softens your sequence of return risk. Now I hope that makes sense. Now I want to say that I don't think Ern's point here is that you never pay off your mortgage or that you don't pay it off early at all. It's just that it shouldn't be the first thing on your radar. You need to get that snowball rolling for you know we always talk about the debt snowball and how it rolls against you. But you want that snowball to roll with you carry you to your FI number. That's when we talk about how the math works for you. This is what we're saying we got to get that snowball going. And when you have a small time line to invest you're more vulnerable to a sequence of returns. Brad was that a light bulb moment for you at all.
blogger, indexfunds, ramsey, stocks
1443 - 1548 Brad Barrett Yeah that was that was really interesting and yeah I think Erns quote was spreading out your equity purchases over years helps alleviate your sequence of returns risk. And I was something I wrote down because there was a it was a very powerful quote and I think what Ern was saying was if you're paying off your mortgage in an extraordinarily abbreviated time period let's say a five to seven years that that means you are plowing every available dollar into that mortgage right to the tune of potentially tens of thousand dollars a year of extra principal payments. So when you're done with that. All right well now you have potentially tens of thousands of dollars a year that needs to go somewhere. And hopefully at that point you're going to put it into equities. But you're increasing your sequence of return risk because you've put nothing nothing nothing from the basically inception till now until this date where you paid off your mortgage and boom then you're just plowing tens of thousands of dollars a year into equities and that's just by definition creases your risk that you're going to put it in the quote unquote wrong time. Right. So that's why spreading it out in hopefully fairly uniform amounts. And of course we hope that they're ever increasing right as your income goes up maybe your expenses go down. But you know your savings rate is going up as your income goes up and and you're putting more money in. Well that's fine that's that's not what we're talking about here we're talking about doing absolutely nothing. And then boom on some random date in the future you're plowing thousands of dollars a week or a month into the stock market. Well I think that's what ern is talking about where where this is a risk. And that was a point that I just never considered before. So as we've said Ern knows the numbers and if he's telling us that increases sequence return risk then I certainly believe him and it makes intuitive sense to me.
savings, stocks
1548 - 1650 Jonathan Mendonsa And you pointed something out. It wasn't just that he enlightened I think people that were just coming from the Dave Ramsey crowd he expanded my perspective of what the problem was and if I were going to analyze what my perspective was basically I was just looking at it that if you decide to pay down your home all you're getting is your 3 or 4 percent rate of return. Right. But if you invest in the stock market you're potentially getting upwards of 8 percent rate of return and then the difference it can be critical for you. That's my one dimensional approach on it. That's where I thought the math was Saying He expanded the playing field by talking about how it affected sequence of return risk and added that second dimension to it which I think might be the last piece that people needed to see the difference because when you're just comparing you know one in the hand versus two in the bush which is a guaranteed 4 percent rate of return versus the possibility of 8. I understand how that's a coin toss sometimes for some people because the market doesn't always go up and cash flow can be a beautiful thing. But when you add this onto it it's almost like when you have the pro and con table you need that extra piece to tilt you to one side. Now I will say that at some point and I think maybe you can make the case once you've hit your number or maybe when you hit the crossover point you know that point in time in which the money that you have in your investment vehicles is actually earning more for you than what you're contributing from your W-2 income. That might be a great place to make a line in the sand paying down the mortgage might be the right play at that point. It won't affect your snowball at some point in your timeline. Your money is earning more for itself than what you are adding to it. And once you feel like that is the case the case to go back and pay down that mortgage aggressively makes a lot of sense. But you've got to get that snowball going my friends and just just keep this in mind as one of the reasons why you might want to consider not paying down your mortgage in your 20s and 30s.
ramsey, stocks
1650 - 1791 Brad Barrett Yeah I heard Jonathan. I think it ultimately comes down to an emotional decision. So you know the way that you just described it almost sounded like a mathematical case like OK once you've reached your number. Well then you could maybe it's a smart move or maybe you can make the case. I still think it's just emotional and I don't mean that good bad or indifferent I don't mean that and you know in a loaded way at all I think the math would always suggest that you should invest in equities. I think that's what the math says and I think Ern would back me up in a certainly. But from that emotional psychological perspective there is a great allure of paying off that mortgage. And I think that's why that question that the Dave Ramsey crowd asks is I know it hits me it hits me right in the stomach because you know you ask if you had a fully paid for home would you take out a loan for three percent on that and then invest the money. And I think my reflexive kind of emotional answer is no because I like that concept of having that mortgage paid off. There is great psychological satisfaction in that. There's there's no question about it. But is that the right move mathematically is that the right move for long term financial success. It probably isn't. But that's and I'm still I still would be OK with it in my own personal life. But Jonathan is not suggesting that that's the right move mathematically nor am I but that doesn't mean it's not the right move for you. Again this goes back to what we talked about earlier in the episode and on many prior episodes you have to take all of the information that we present that many of these other thought leaders present and you need to figure out what works in your life that is ultimately what this comes down to. So we are not dictating on high that you need to take out a loan at 3 percent and invest it because that's what the math would suggest. That's garbage. If that doesn't work for you if that doesn't help you sleep at night. So take the information and talk about this. Mull it over. Figure out what works for you and game it out so that 10 years from now 15 years from now or whatever it is when this situation actually arises in your life you've thought about it right like that's really powerful. Is game planning this out and thinking about what will what will I think about emotionally and psychologically what will that look like when I do reach that number when I reach X point in my life that helps you and will help you immeasurably.
ramsey
1791 - 1835 Jonathan Mendonsa Yeah and I'll say that I'm not an ultra optimizer I'm not specifically a math guy. I'm very diverse. It goes back to what I was saying earlier and you make the same case for student loans I had a six figure amount of student loan debt big Ern would tell me if I were to just go get his advice based on the math using the same points I just laid out I have a fixed interest rate. I'm young. I have a high marginal tax bracket. I should not pay down my student loans just based on the math and I should plow every dollar I can into my investment vehicles fill those suckers up let it ride pay down the student loans over time. I didn't do that I paid them off and I tell you I sleep like a baby at night. And so I can see how you could extend that over to the mortgage as well. But you're going to have to find your own personal tolerance and comfort zone there. But this is the math.
college-loans, debt, tax
1835 - 1844 Brad Barrett You know what would be fascinating Jonathan and I just thought of this now is I know you kept detailed spreadsheets of your the amount that you paid off each month for your student loans. right.
college-loans
1844 - 1845 Jonathan Mendonsa Yeah. Yeah I did.
1845 - 1853 Brad Barrett I I'd be so curious like send that to earn and have him run the numbers on like if you had invested in VTSAX
indexfunds
1853 - 1855 Jonathan Mendonsa I don't want to know.
1855 - 1859 Brad Barrett Wouldn't it be interesting like I know you don't want to know if you would like it would be so fascinating.
1859 - 1865 Jonathan Mendonsa eSpecially when I'm in like a for 35 plus percent you know marginal tax bracket it would be so painful.
tax
1865 - 1882 Brad Barrett Yeah. No I mean you'd have to include that too yeah I mean. And that's not to suggest that you made the wrong decision because like you said you sleep like a baby. But that's what we're talking about here but I like the math might suggest a different answer. But that doesn't mean you made the wrong decision and that is really powerful.
1882 - 1891 Jonathan Mendonsa Dagnabit alright Ern. I will. I'll send you my numbers man you can run that for me. I don't really want to know but I'll send it to you.
1891 - 1911 Brad Barrett But also that's not to suggest we've had a great run up in equity in the last couple of years so you might really see a number that you don't like but that's not to suggest that that would be the answer every year. Right. Isn't that would sequence a return risk is about that that there are different results depending on the year that you started the cohort you're in as Ern would say.
1911 - 1949 Jonathan Mendonsa Yeah. Well let's see Ern. I'm not exactly sure what you would need to know but I would imagine just to give you off the cuff numbers. Basically I had one hundred sixty eight thousand dollars in student loan debt and I paid them off over four years and I did that while being in a 25 percent marginal tax bracket. And then state tax of 8 percent. All that jazz. And then it was that a 6 percent interest rate so I probably ended up plowing a hundred and eighty some odd thousand dollars in after tax dollars. I mean that's probably enough you know and I don't really want to know the answer to that. But you can you can do the math very quickly and come up with off the cuff number of what that might look like. You would have done probably very well by making the opposite choice of what I made.
college-loans, debt, tax
1949 - 1953 Brad Barrett And did you not max out 401K because you were paying off student loans.
401k, college-loans
1953 - 1983 Jonathan Mendonsa I did not. I got the match. Got my my 4 percent. But yeah I mean but if I hadn't done that I would still have two years on my student loans now and I would be tied down and not have nearly the flexibility I have. So like you know I make I mean to make an announcement in a couple of weeks here about some FFL related stuff fully funded lifestyle change stuff. And if you have extremely low costs of living because you paid off all your debt your ability to take risk in the future goes up a lot higher. So there's definitely more dimensions to this than just the math.
FFLC, college-loans, debt
1983 - 2025 Brad Barrett Yeah and that's and that's where we're talking about right there. There are always these factors and that's what's so cool about talking about this from a real high conceptual level but then getting down into the nitty gritty of someone's situation and many tens of thousands of someones who are out there listening to this like every single person has a different situation. So yeah just fascinating fascinating stuff. And one other point that I wanted to make which is directly tied into this how absolutely amazing is it that Ern went to college for free and then invested his student loan for a positive net worth after the fact. Like just how perfect is that. And completely appropriate and just something you'd expect from someone like Ern it's just brilliant.
college, college-loans, networth
2025 - 2196 Jonathan Mendonsa I just want to see more stories like that because you know that's like an Edmund move right there. There are people in our community that just do this stuff and they never had a place to talk about it anywhere else. They would just get totally these kind of these weird sidewise glances. But in our community like this is the stories that we want to highlight and they don't need to be the exceptions. They can be the rules they can be the models you can start modeling your choices after these what seems like an unconventional choice at the time but then when you're looking at it with a slightly different perspective you say what an obvious choice. Why doesn't everybody try that or something similar to that. The last thing I wanted to talk about is this ongoing debate between dollar cost averaging and lump sum investing and we talked to a lot of the influencers in our space and specifically I had to ask both J.L. Collins and Big Ern this. You know you get this windfall of say $100000 or more. Could be any number you want. And it's 4:00 p.m. in the afternoon you're driving to the airport. Or conversely that was that was an inside joke for people listen to the episode but you're investing in the stock market when your PE and Cape ratio are at a near all time high and you're wondering is this the right move. Should I just throw it all in at once because that's what the math says or should I. Dollar cost averaging and invest it maybe piecemeal over an extended period of time and I over to Ern expecting an answer and I got first of all the answer that I pseudo anticipated which is lump sum investing is the way to go. But then what I love what he did is he gave me this option C that I had never considered before and I hadn't heard anybody else consider which is the best of both worlds he said recognizing that it may be 4 p.m. in the afternoon if you want to get the best of both worlds and you know you absolutely know you're going to get this windfall of pick a number and it doesn't have to be $100000 it could be you know even number smaller than 50000 20000 whatever it may be. If you want to dollar cost average it and you know it's coming in. What if you borrowed the money from some other place maybe like your emergency fund or some other vehicle or cash or a headlock or anything else and you invested that money into the stock market head of time. One third of it and then when you got the actual windfall and you invested another third of it in. And then finally maybe a month or two later but that's a very equal amount so one month before the day of and then one month after you invested that final third. And so this way you get the benefits of spreading that money over three distinct points that way you don't have to worry about you picking that very moment right before the market goes to a downturn. But at the same time when you average those results in together it's still like you had done a lump sum investment. Totally brilliant. Never heard anybody else mention it something that it's a tool that you can put in your back pocket if you were to ever experience that guaranteed windfall which many of us at some point in our life will have some form of a windfall coming our way. Although I doubt in our community it's coming from the lotto ticket at the 7-Eleven. Nothing Brad nothing.
stocks
2196 - 2199 Brad Barrett yeah I got nothing on. That is very true.
2199 - 2204 Jonathan Mendonsa Those are my big takeaways. I feel satisfied that I've done my due diligence on this episode. Was there anything else that you'd like to cover today.
2204 - 2289 Brad Barrett Yeah there was just one other quick thing. But it's actually more of an open question to Ern which is there was one important thing that I heard that that may have been missed by the audience. I know I kind of missed it the first time through is around minute by. Thirty seven thirty seven and a half. And he basically said one way to help alleviate sequence of return risk is to have a larger bond portfolio in the very early years of retirement. And then to move to a higher percentage of equities after the first let's say five years. And this intrigued me significantly because I guess he's saying one of the big sequencing return risk possibilities is a significant and prolonged downturn. Let's say the first five years and having a higher percentage in bonds which might not be your long term strategy but that might help alleviate that issue in the first let's say three to seven years or thereabouts and then move back into a larger equity percentage. So this is something again that was just kind of in passing Jonathan I'd love to hear your thoughts on it but but I'd really love if I know Ern listens to these episodes if this is something he can record an answer to and send it back to us. I think this is worthy of some more thought and some more discussion. So you know again that's why these roundups are great. Right it gives us an opportunity to I missed that the first time and I didn't follow up with Ern which I should have as the host. But but I get to now. So yeah. Love to hear from Ern and Jonathan if you have any thoughts.
2289 - 2465 Jonathan Mendonsa Yeah. I actually do have some thoughts on this but they're not really mine. I'm going to share. This is from Danny on our Facebook group and I've been very impressed just by his general insights on his allocation models. And I'm particularly interested in it because he actually went through the 2008 downturn and came out OK on the other side. And so he's actually in recent memory how to deal with this and had some thoughts to share about what this looked like for him. And so his short answer of what he actually does he agrees with us one that flexibility is the key to this whole thing. And for him it means flexibility means over saving. Having two year spending in bonds and then keeping your skills up to date so you can add back into the workforce if you need to and then maybe considering your house paid off. So clearly the answer here is not just NEVER pay your home off. The key is flexibility knowing the math. But aside from that Danny retired in 2006 he got hit very hard in 2008 but he had 60 percent stocks 40 percent bonds. And so he was able to stick with his strategy. He says I sold my bonds and kept buying stocks as the market was moving down keeping my 60 40 mix. If you have 100 percent in stocks and you're retired you are far more likely to freak out and abandon your strategy. I saw it happen. I give up about point five percent and expected returns for every 10 percent that I hold and bonds but it protects me against my worst risk which is myself abandoning my strategy. Things are very different between the early accumulation phase and the pre-retirement phase and I think there's so much value here a lot of us feel like we're very confident that we won't be faced by a market downturn and we can say you know what if the market crashes it'll will be the best thing that ever happened to me. But if you just take your number let's say your number is $600000. You just get your number and the market crashes and you go down to 225. You're telling me that you're not you're not going to bat an eye especially if you just pulled your FI trigger and you're now completely relying on that income. Danny is providing some great insight on what actually look like and how he managed that and it goes back to JL Collins said about you need to be able to sleep at night and bonds smooth the ride. And what we're hoping to do as someone that hasn't lived through having to deal with that specifically I mean drawing down all my money through a crash I can say that I can't truly appreciate what that must be like. But getting a chance to benefit from what other people have done in the value of this show is that we're able to find them and they're willing to share with us how they interacted with the circumstances that they were presented with. Hopefully we can gain some backbone some spine and also some ideas on how to manage that. And so for Danny his number was twofold it was a 60:40 allocation but it was also this idea of he knew he had two years worth of money in bonds. And so plus he had more than he needed. So those two things add up to flexibility. Now I will just say that this is not an episode about drawdown strategy. We are actually planning on doing a show or several shows featuring different strategies but hopefully the psychology of this and how people have handled these downturns will prepare you for when it comes because you'll know what other people did that managed to ride it out and thrive on the other side.
savings, stocks
2465 - 2544 Brad Barrett And yeah we can never know how we'll react psychologically until we're in that scenario. But again learning from people who have been there mentally rehearsing and preparing yourself for that possibility. These are all things that are going to help you and basically help you not freak out and sell at the worst possible time and Ern said something to this effect and this was about buy and hold investors so it's not exactly pertinant but basically they don't have to worry about sequence of return risk as long as they quote didn't do anything stupid like sell at the bottom. And I think that is something that Jim Collins talked about in last week's episode Ern talked about here it's that is really the worst case scenario is to sell at the bottom and just freak out. So you need to prepare yourself years in advance too. OK. If this happens here's my response and you need to just almost like game plan an outright mock plan that's as if it's going to happen. How will I respond. So I think there's great power in that and it's just visualizing it's rehearsing and trying to figure out what will I do because downturns are inevitable they will happen. It's a guarantee. And you just don't know when you don't know what that's going to happen the day after you hit your FI number and you pull the trigger. Or 10 years later and you're already fine past the sequence of return risk issue. You just don't know. But you need to prepare yourself. In my opinion for the worst case scenario and see how will I react.
2544 - 2575 Jonathan Mendonsa OK. As usual your thoughts your feedback send it to us feedback at choose fI dot com. And if you want to join this conversation and you want to continue it week round go to our Facebook group and if you want to be a part of that private group just go to choose FI dot com slash Facebook. Follow the prompts there we'll send you the link to the private group. We'd love to see you on the other side of this conversation. Have you be a part of it. I get a chance to actually put your questions out there and get feedback from us and also from our community which is now Brad more than 2000 people we slipped over that line while you were out of town this weekend.
2575 - 2628 Brad Barrett Yeah I saw it. It's remarkable. I think we're over 2100 at the time we're recording here. It is growing by leaps and bounds and we kind of joke me you son Wu and Noah the four admin moderators We were joking in a little message that we can't keep up with it. It's amazing there are just so many comments so many insightful comments so many insightful questions threads. I mean it's just it really is remarkable and we're not just blowing smoke. I mean like this is the community that we envisioned when we started ChooseFI and it's here it's real. And more and more of you are joining every single day and it really is wonderful. So I definitely hope you like this conversation if you like this. The information that we're sending this community is not about me and Jonathan it really at this point it's so much larger than that. And the Facebook group is where you see that. So yeah just choose FI dot com slash Facebook and yeah please join us join the conversation.
2628 - 2652 Jonathan Mendonsa OK so let's take a few minutes and talk about what's been going on in our community over the last week or two. First of all Brad I know that you pose the first challenge to our Facebook group and specifically you wanted to know how people are taking action and you had over 250 responses on how individuals in our community were taking that first step to improving their lives and hopefully just taking their game to the next level in every way.
2652 - 2772 Brad Barrett Yeah that was amazing and blew me away beyond any expectation. But that is going to be a weekly post. So every single week. And that's my challenge to the community. Right. Jonathan you and I we talk about actionable steps. That is what we hope every single episode. You're not just listening to here as banter and talk about random stuff. It's to come away from every single episode with something you can take action on and something that can improve your life and a real simple thing to do is just to do one thing this week. OK. You have seven days. You have 168 hours to make just one simple change that will either make your life more efficient maybe shave off an hour of busy work or just you know wasted time or doing something that will help you save money or that all your long term health and wellness just just anything something you know even just play a board game with your family just something different something than that you disrupted again like we talked about with Dominic putting that space between the stimulus and the response. Right. And just doing something different in your life to make it better. Right we all complain about being busy and that's just not good enough. Right. You have weeks and years and decades to make your life better. And it is incumbent imperative upon you that you that you take action right. This is not a passive thing. You need to take action. So anyway long story short. Every single week I'm posting this. And man seeing 250 responses was just mind blowing and it really just gave me hope and it it just hammered it home. Jonathan that that you and I are doing something here that's working right that people are listening and taking action and improving their lives. It was it was amazing. And yeah we would love to read a bunch of these on the podcast but just because of the fact that I'm sitting here in my in-laws basement and we're trying to furiously record a couple of podcasts today we're going to we may cut this episode a little bit short but rest assured Jonathan I read every single one of those and we definitely plan on talking about them in the future.
families, health
2772 - 2775 Jonathan Mendonsa But I will say that Mary started eating an apple a day. Very proud Mary.
2775 - 2777 Brad Barrett Hey. Good way to go Mary.
2777 - 2829 Jonathan Mendonsa OK so we have a travel rewards voicemail they to play today and this is from Andrew. And a lot of our community has been introduced to travel rewards for the first time because of this podcast. We pride ourselves that that is actually a very useful resource and a great way to lower the bar to entry to travel rewards. If you weren't already aware of the possibilities of being able to travel the world for free or nearly free and at this point many people in our community have not only gotten started with their first travel rewards card but they're now in the process of booking their first trip and as our community starts to get more and more aware of the possibilities. Hopefully we will continue to get more and more voicemails like these that we will be at a play for you and share these really cool ideas and these really cool trips that you can piece together just using creativity and optimizing the way that you go about your day to day purchases just a little bit. So this is from Andrew and I'm very excited to play this for you.
travelrewards
2829 - 2924 Andrew - (voicemail contributor) Hey guys my name is Andrew and I'm calling in from Chicago. I've got an awesome frugal win that's in process that I love to share with you all. So the basics are my girlfriend and I we want to go to Argentina in December of 2018 and while we can't put that far out yet. I've been searching for flights for December of this year just to get an idea of what the costs are now flights typically run from around fifteen hundred eighteen hundred dollars roundtrip per person. That time of year especially if you want to avoid multiple layovers. So I've been doing some research and I discover that United is actually a great option for flying from Chicago to Argentina. And in listening to your travel rewards podcasts I remember that it was worth taking a look outside of the chase travel portal to see how many united points we would need to cover our flights. And since we're pretty flexible on dates there are plenty of options for booking flights for 30000 United points. That would be 60000 roundtrip and that's 120000 total points for the both of us roundtrip. So now that I know that I can transfer our chase United rewards points one for one to United. I'm basically positive that we're going to be flying roundtrip from Chicago to Argentina for 120000 total points in their prime tourist season. So the cool thing here is just by setting our travel goal ahead of time doing a little research and getting a little credit card strategy behind us. I know it's going to be easy for us to accumulate well over those points in the next six to nine months or so. And what this really means is we're going to be saving three thousand thirty six hundred total dollars while getting a dream vacation. So a free trip to Argentina. It looks like it's in our future. That's insane. Thank you guys for the wealth of knowledge you're providing. The fire is definitely spreading.
savings, travelrewards
2924 - 2928 Jonathan Mendonsa Alright Brad. I know that you're just itching to go. So that is awesome.
2928 - 3087 Brad Barrett Yeah that's brilliant. A Congratulations Andrew. That's fantastic. That is a huge savings and basically as good as it gets. And not only that but you approach it in such a logical manner and really with all the hallmarks of what I described to people as ways to succeed. So flexibility that's the crucial part. You said in there we can be flexible with our dates and around prime tourist season like you said there are naturally there are going to be other people flying. So there are going to be other people looking to book these award flights. That's just a reality. Because you can be flexible plus or minus a couple of days or even a couple of weeks that's going to increase your chances of success significantly. Another thing is you're planning a year and a third in advance or thereabouts. I think you said December of 18 I'm not 100 percent positive but I mean that is huge that you have that much time in advance to scope this out to open up particular credit cards to get these points and then to book as soon as you're ready right as soon as you can find availability. So all those things are going to lead to success. And then that you had the epiphany that hey not only do I have the option of book through the chase ultimate rewards portal which is basically just going to be based on the price. So if it's 15 eight hundred eighteen hundred dollars Chase gives you I think 1.2 five cents per point. If you have the sapphire preferred or the ink plus. And and that's it. So there's no way to get that amazing deal that you found when you had that aha moment and said oh wait i can transfer these points. So my Chase ultimate rewards points become united. Miles. OK. And in that case you could get a roundtrip for sixty thousand miles. And if that's going to save you. Eighteen hundred dollars. That's three cents per point. That is a great redemption show that sure as heck beats the 1.2 five cents per point that Chase would give you to book through their travel portal. So just very simply find the availability. Transfer those 120000 points from Chase to United. And that happens instantly. So you would only transfer once you found the availability and then just booked them. And in this case earn nearly or an upwards of three cents per point. So yeah I mean all around creative creative work and just good job Andrew and congrats So to everyone out there we have a wonderful resource and really set of resources if you had to choose FI dot com forward slash travel. You'll find our podcast which is Episode 9 our original podcast on travel rewards. We've subsequently done a second podcast on travel rewards and a bunch of articles are recommended cards page. There's a whole bunch of resources there so we choose Fi dot com slash travel.
savings, travel, travelrewards
3087 - 3116 Jonathan Mendonsa OK. And I have a frugal win of the week for you. This one is from Ashley and Ashley says I finally reached my car goal. Three hundred thousand miles on my first car that I purchased new it's a 1999 Toyota Solera. Took me 18 years and two months to reach the goal. The car has no rust and still runs great. The maintenance is done by a cousin who is a mechanic and works on the side for the family. Brad first of all she's making you look like a rookie. 300000.
FWOTW
3116 - 3124 Brad Barrett Yeah I mean I've got it. I think I have 114 thousand now and Laura's car just past the 108 thousand So yeah combined are not even close.
3124 - 3181 Jonathan Mendonsa OK and then my second thing here is this idea of having a mechanic that you trust. I think many of us instinctively have this feeling that we're going to pick a mechanic that is not going to do right by us right. It's just this I'm not going to go find the right guy. But if you are lucky enough to find a mechanic that you absolutely trust share that information like share it with me. If you live in Richmond Virginia and you have a mechanic that you absolutely trust. Shoot me an email let me know because I want to find a guy and actually if you stretch that out with almost every aspect of your life finding a group of people that you can rely on for different things that you trust is so valuable and you know one of the reasons that she made it the 300000 miles is that a mechanic that works on the side for the family and for me that's something that I want to have. I don't have I almost want to say that's a checkpoint of FI if there's some sort if there's some sort of checkpoints that have to do with vehicles in the FI community then somewhere on that list has to be I found a mechanic that I trust and I rely on and I'm still trying to check that box. What about you.
3181 - 3219 Brad Barrett Yeah it's hard. It really is hard for some reason. Yeah that industry just has this reputation whether right or wrong that you know you're going to find someone who's unscrupulous and who's going to somehow screw you over. And I'm not sure if that's fair frankly but but it does seem to be something that people talk about all the time and yeah I mean I found a local company here that seems to be trustworthy. Like the people I speak with there but at the end of the day unfortunately you don't know and it's because I haven't taken the time to learn about cars. Right. Like that's something beyond my scope of knowledge and they could tell me anything when I walk in there and unfortunately I would have to either believe it or take it somewhere else right.
3219 - 3225 Jonathan Mendonsa Never been there and it's cost less than $200. Every single time it's just the magic number. OK. OK. Sure.
3225 - 3242 Brad Barrett Yeah whatever you say. they just take a make up parts. But but no these guys seem to me to be very reliable. But yeah at the end of the day unfortunately unless you're going to educate yourself or find someone that you know or trust that's it is difficult. But yeah you know we're not trying to disparage an entire industry here. But it's an interesting conversation nonetheless.
3242 - 3244 Jonathan Mendonsa I need to educate myself. Going to work on that.
3244 - 3266 Brad Barrett Yeah. I mean that's what everything is about. Right. Like if you have some barebones knowledge it's difficult to get suckered that far extends beyond this. But unfortunately there are lots of things to learn about and at some point you do have to outsource something that's something that I have deemed as something worth outsourcing. But you never know if I'm inquisitive enough maybe it will be something I learned about.
3266 - 3410 Jonathan Mendonsa Fair enough. OK. Another one here Kelly is actually hosting a meet up out of Milwaukee and I believe wealthy accountant is going to be there. But Jim actually gave us a copy of his audio book the simple path to wealth. And we were able to share that with Kelly and she's going to be able to offer that in some capacity at that meet up and it's amazing to me how much enthusiasm I'm seeing for meet ups on our Facebook group. I mean they are popping up all over the country. It's almost this groundswell of people that have suddenly realized this idea of community has so much power and it's so valuable to be able to find like minds that are pursuing a common goal and that common goal isn't the 2018 Range Rover super sport right. I mean there is power in the people that you're trying to model yourself after are people that are pursuing a 30 40 50 and 75 percent savings rate and that's just it's really cool to see this groundswell of support for the idea of meet ups for people that have never considered this possibility before and going into next week the very next episode that we're going to have going to be you know obviously this upcoming Monday it's going to be a second episode with JL Collins that's going to be part two. It's going to be broken up into two parts the first part is us discussing the idea of community discussing the Chatauquas a little of the camp moustache and some of the other camps that were seeing popping up just exploring this idea of connecting with other people that are of like mind. And then the second half of that is going to be an Ask Me Anything with JL Collins and these questions are being sourced from our Facebook group again coming from our Facebook group. This is the lifeblood of the show. So we're really looking forward to sharing that with you guys and that's coming up in three days this upcoming Monday so definitely look forward to that. The way that we finish our Friday roundups is we actually read some feedback that we received on iTunes each week from people in our community and we actually do a drawing for this so we do a drawing for a copy of a book that we found valuable and currently we're doing JL Collins book the simple path to wealth and we also have a couple copies of Dominic Quaruccio's book design your future and to enter this drawing just leave us a short written review on iTunes to do that you can go to choose F-I dot com slash iTunes. Just follow the directions there to leave us a review and then we just ask that once you've done that if you want to be a part of this drawing that you just send us an e-mail to feedback at Choose F-I dot com letting us know that you left us a review and let us know what screen name you left it under so that we can match you up and then we do one book for every five written reviews that we get and we announce the winners on our Friday round up. And Brad how many winners do we have today.
accountant, savings, testimonial
3410 - 3440 Brad Barrett Today we have two winners and the first one is Nicholas and Nicholas called this life changing. I can't consume it all quickly enough. I've awoken choose FI was tremendous in helping me piece together what FI will look like for me. Brad and Jonathan pull from fantastic resources and true life stories painting the picture of a package I can create for myself and one that I can't possibly walk away from. I'm beyond excited or obsessed to realize entirely new goals for myself and my future. Thank you.
testimonial
3440 - 3457 Jonathan Mendonsa Yeah we're glad you're here. It's thrilling to be a part of this not just to be able to put this message out there twice a week basis but also just to learn right along with you guys. We can't walk away from this either and so we're actually designing our lives in many cases around this show that's how passionate we are about getting this out there.
testimonial
3457 - 3459 Brad Barrett All right and Jonathan our second winner is Danielle.
3459 - 3571 Jonathan Mendonsa And Danielle says all fired up. I stumbled on to choose FI a few months ago after delving deeper into the personal finance of financial independence realms. I've listened to every episode more than once since then. I'm still working on paying off student loans. But this podcast not only provides entertainment but it also provides actionable items that I can implement even while paying off debt. It has also energized me to figure out how to readjust my budget solidify the concept of travel hacking and pushed me to roll all of my Roth IRA 403 B funds into the institutional version of VTSAX.. My only request is to hear from people who are working towards or have achieved FI who aren't married or were earning less than six figures. This is a phenomenal podcast and is the only one I specifically make time to listen to when new episodes air. Highly recommend. Thank you Danielle and we will try to act on those suggestions. It's certainly one of our spoken goals has been to explore this amazing journey from all the different ways that people tackle it and there are an infinite number of ways to tackle this. This ultimate goal of financial independence and we want to get a chance to do it really for every scenario. Whether or not you're finding this journey for the first time in your 50s or whether or not you're 16 years old and your second gen fi and you want to see how early you can push this saying get this thing rolling. We want to find and explore ways to make this work for you and then present those on the show. This is by the fire community for the fire community and let me just finish by saying for a very very short period of time. JL Collins actually reached out to us and he just released his audio book the simple path to wealth and so is the audio book version of the simple path to wealth. He has given me just a few downloads available for that. So for the next couple of weeks if that is something that if you heard your name today and you'd be interested in getting a audio book version of the simple path to wealth as opposed to the written book just let us know in your email and we can hook you up for a very short period of time. So thanks to JL for making that possible for us. The fire is spreading my friends and we'll see you next time as we continue to go down the road less traveled.
2ndgenfi, Jonathan_Catchphrases, college-loans, debt, indexfunds, roth, testimonial

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